Sterling Has Rotten Week As EU Campaign Takes Off

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Sterling has taken a real pounding this week as politicians pontificate on the pros and cons of the UK staying in the European Union.

While the voters in the June 23 In/Out referendum need facts and figures to determine whether the UK should stay or go, politicians seem to be jostling for career positions.

The result is their opinions have injected uncertainty into the currency markets and the Pound has had one of the currency’s worst weeks against the US dollar since March 2009.

The Pound has lost 2.8% against the dollar, dropping to $1.38.

The end of the week saw a slight rally but little improvement in exchange rates.

Blame for Boris Johnson

The blame is falling on London Mayor Boris Johnson, who has been a long-time ally of Prime Minister David Cameron.

The pair have a history stretching back to public school and university.

Johnson announced that he had to make the ‘emotional decision’ of backing the call for Britain to leave the EU.

Many believe the real reason Johnson is backing the out campaign is to raise support for a challenge to take over the leadership of Tory party for the next general election.

Cameron has made clear he will step down as leader at the election in 2020.

Cameron, leading the ‘remain’ campaign, argued that the impact of the news against the pound shows how much trouble the British economy could be in if Britain leaves the EU.

Uncertain polls

The polls are undecided about the referendum vote.

Most show that around a quarter of voters are undecided and many pollsters believe that those responding to surveys are giving a false result because the rival campaigns are priming the samples to give false readings.

A recent report blamed polls getting the result of the general election wrong because the samples were too unrepresentative.

More uncertainty concerns the markets because the campaigners on both sides are spinning to much information for voters.

For instance, the European Commission president Donald Tusk made a statement confirming David Cameron’s agreement with the EU could not be challenged in court – despite opinions to the contrary by out campaigners and their lawyers.

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